What Is A Mortgage Broker?

When you're shopping around for your mortgage, you may be asked by your real estate agent whether you're going to get your loan from a bank or a mortgage broker; or he or she may recommend a mortgage broker to you to expedite a loan, or even make it possible when you're suffering the effects of bad credit. A mortgage broker is a financial agent who acts as a go-between for you when you're trying to navigate the often-confusing paths of getting a loan. Mortgage brokers know what a variety of lenders are looking for in customers, and they are experienced in finding you money when it seems no one can help you. Mortgage brokers profit by making a broker's fee, much like a real estate agent makes a commission on a house, because their specialty is matching the consumer and his or her special needs with banks and lenders who can fulfill them. Mortgage brokers shop around for you to several different banks, looking for the best deal for you in the amount of money you can borrow as well as the best interest rates possible for you. If your credit has some issues, a mortgage broker may be able to find funding for you that you could not find for yourself. Fees paid to a mortgage broker come from both you and the bank they find for you. About half of all loans originate from a mortgage broker. Mortgage brokers also understand how banks function when loaning you money. Banks rarely loan money to you direct; instead, they make a contract with you that the money will be available; they then turn around and sell your loan to a large investment corporation like Fannie Mae or government pension fund. Generally, you won't receive your actual loan until this process is complete. Again, your mortgage broker may be helpful in this process by speeding up your closing and finding you the best rate from the investor. When you use a mortgage broker, be certain you know up front what the fee is going to be, and what kind of deal the broker feels he can make for you. You can compare that with the deals you can come up with on your own and determine whether any savings will be worth the broker's extra fees. Brokers are go-betweens. Their interest in your real estate purchase ends when the house is sold and they collect their money. Though mortgage brokers are generally honest and will find you the best deal, you should always remember to look out for yourself when finding a mortgage; if you don't like the first deal offered to you, you don't have to accept it

What Is A Mortgage Broker?

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